Exit polls lift Sensex by 1,421 points,largest single-day rise in 10 years

Call it the Modi rally. The Sensex and Nifty on Monday made mighty gains of 3.75 per cent and 3.69 per cent, respectively, their largest single-day rise in a decade, on the prospects of the BJP’s return to power with a simple majority.

Most of the exit polls predicted that the BJP would manage to cross the majority 272-seat mark on its own in the 2019 Lok Sabha polls. The Sensex rose 1,421 points to 39,352 and the Nifty gained 421 points to close at 11,828.

Foreign portfolio investors (FPIs) bought stocks worth ₹1,734 crore in the cash segment. Domestic institutional investors were net sellers to the tune of ₹543 crore. FIIs had been on a selling spree for the past few weeks as some of their internal surveys had suggested that the BJP could fall short of a majority in the elections due to the economic slowdown.

Usually, experts factor in a margin of plus or minus 10 per cent in exit polls, but still even in that scenario, it is a forgone conclusion that the Narendra Modi-led government is slated to return to power with a majority.

Market players say there is some more room for an upside if the exit poll results come true and the BJP manages a majority on its own.

“There is room for an upside as some of the large market players seem to have got it wrong in terms of the BJP’s poll prospects. But in the next few weeks, the markets would look to debt woes, which could be the focus due to debt instruments of mutual funds coming up for redemption and other global factors. It is likely that markets will give up some gains then,” said Mehraboon Irani, an independent market expert.

The market scenario globally was in sharp contrast to that in India. European markets fell by over 1 per cent while those in the US opened lower. The Dow Jones index fell 0.18 per cent while the tech-heavy Nasdaq was down nearly 1 per cent. US President Donald Trump’s latest warning to Iran has sparked fears.

COMMENT NOW